Games and ads boost Sohu profits

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Games and ads boost Sohu profits

Profits at Chinese web portal almost tripled in the last quarter of 2007, the company reported today.

Net income rose to US$15.1m, compared to US$6.1m in the same period last year. Fourth quarter revenue, at US$65.3m, was close to double the figure for the previous year.

The figures were well ahead of analyst estimates, and gave Sohu a provisional revenue total for 2007 of US$188.9m, up from US$134.2m in 2006.

Sohu's key income generators are online games and advertising. Quarterly games revenue grew almost tenfold over the year to reach US$24m.

Most of this revenue now comes from Sohu's self-developed massively multiplayer role-playing game Tian Long Ba Bu.

Revenue from sponsored listings included in results from the company's search engine, which was developed in-house at considerable expense, slid to $1.53m for the quarter.

"Sponsored search revenues decreased 44 per cent year on year mainly due to strengthening of our anti-fraudulent click policy starting mid-2006," the company said in a statement.

Sohu predicts revenues for the first quarter of this year of between US$66.5m and US$68.5m.

"With the Beijing Olympics kicking off in 185 days, the Sohu brand resonates across China as we broaden our media reach to penetrate the Olympic audience," said Sohu chairman and chief executive Charles Zhang.

The diversity of Sohu's online businesses means that it faces competition in different areas from several similarly-sized local rivals, including, Sina Corp, and Shanda Entertainment.

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